Dan Flynn is the writer of The Corn & Ethanol Report, a daily market letter covering grains, energies, and various global issues that are the driving force and backbone of the commodity markets. Contact Mr. Flynn at (312) 264-4374
Is the Natural Gas rally Seward’s Folly or is it sustainable here in shoulder season heading into summertime months. This morning we have the weekly EIA Gas Storage report and the Thomson Reuters poll with 20 market analysts predict draws anywhere from 28 to 55 bcf which compares to last week’s draw of 150 bcf, last year at this time of 19 bcf and the five year average of 27 bcf. So these predictions may be the culprit of the latest spike in prices. In the overnight electronic session the May Natural Gas is currently trading at 3.181 which is 5 cents lower. The trading range has been 3.228 to 3.179.
On the Crude Oil front the market’s rally from yesterday was stalled on news out of Europe broke the Euro Currency and cause a U.S. dollar rally. After a not so great GDP number the market is showing resilience buoying back to fair value. The market is flirting with psychological resistance and need to close above $50 a barrel. In the overnight electronic session the May Crude Oil is currently trading at 4985 which is 34 points higher the trading has been 4998 to 4927.
On the Corn front the market and the Grain complex seems to be under pressure the last few trading sessions after the surprise run in Soybean Oil which sparked a rally but now the complex looks to be in selloff mode ahead of tomorrow’s Planting Intentions report. Expectations for Corn plantings are expected to retreat 3.72 million acres to 90.28 million acres per Jerry Gidel at the Price Group. Jerry also expects another bumper crop as forecasters are calling for a neutral to modest el Nino pattern by late summer. In the overnight electronic session the May Corn is currently trading at 357 ¾ which is ¾ of a cent lower. The trading range has been 358 ¾ to 357 ¼.
On the Ethanol front the market is trading on fear (Changes at the Environmental Protection Agency (EPA) and quotas on the Renewable Fuel Standards (RFS), OPEC production cuts and tomorrows USDA report on expected Corn plantings. The April Open Interest is now down to 280 contracts with 1 contract traded at 1.580 so let’s change our focus to the May contract with current Estimated Volume at 21 contracts and Open Interest at 2,836 contracts. The market is currently trading at 1.609 with a trading range of 1.615 to 1.605.
Have a Great Trading Day!
Questions? Ask Dan Flynn today at 312-264-4374
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